Cactus Buys Koch Feedyards,
Regains Biggest Feeder Title

AMARILLO — Cactus Feeders is once again the largest cattle feeding operation in the world.

Amarillo-based Cactus Feeders bought three feedyards this month from Koch Industries Inc., bringing their one-time capacity to more than 460,000 head, surpassing New York-based Continental Grain.

Continental Grain has a one-time capacity of about 405,000 head. It had replaced Cactus as the largest feeding operation in 1991.

Cactus Feeders President Paul Engler says the purchase of the additional feedyards was not an attempt to be the largest cattle feeder in the world but simply to better serve his customers.

"The purchase of Koch Beef Company's three feedyards allows Cactus Feeders' customers to benefit from geographic diversification," Engler says. "We believe the High Plains area will remain the hub of the nation's cattle business far into the 21st Century."

Cactus also has feedyards in Hereford, Tulia, Cactus, Stratford, Spearman and Perryton, Texas. In addition to their feeding operations, Cactus runs stocker cattle, has 2000 mother cows and 140,000 acres of farm and ranch land. They employ about 500 people. A company spokesman says most of the employees with the feedyards purchased from Koch will be retained.

Cactus is also building the first custom cattle feeding operation in Argentina. Their feedyard should be complete about the first of May and have a one-time capacity of 25,000 head.

Koch announced in November that it would sell its four feedyards. It sold its feedyard in Lubbock, Texas, in December to a group of employees. Cactus bought the other three.

Headquartered in Wichita, Kan., Koch still has intensive grazing operations near Lakin, Kan., one near Follett, Texas, and four ranches. They have two in Kansas, one in Texas and one in Montana.

"There's still a huge commitment by Koch to the beef industry, Koch spokesperson Mary Beth Jarvis says. "The ranches are part of that and so is Purina Mills."

Koch bought the livestock feed processing company last year.

"We'll continue to look for opportunities in the beef industry," Jarvis says.

Both companies declined to disclose the selling price of the three feedyards with a combined capacity of 112,000 head. Steve Kay, publisher of Cattle Buyers Weekly, an industry newsletter, has estimated the selling price to be in the neighborhood of $12 million.

Engler says depressed cattle prices during the past couple of years made this an opportune time for Cactus to expand its feedyard capacity.

"This decision is a long-range one," he says.

He notes, however, that he expects the business to get tougher before it gets better.

"The cattle feeding industry is going to have to be satisfied with much lower margins than they have in the past," Engler says.